When the IRS Does Know Your Race

Professor Jeremy Bearer-Friend (GWU) sparked much productive academic dialogue with his article, Should the IRS Know Your Race? The Challenge of Colorblind Tax Data, 73 Tax L. Rev. 1 (2019). He ultimately argues that the IRS should not collect such data on the Form 1040, favoring instead alternative intermediate steps that he describes in the article. (Of course, as Professor Bearer-Friend points out, scholars like Dorothy Brown, Beverly Moran and others have drawn on other publicly available sources, such as the Current Population Survey and Survey of Consumer Finances, to triangulate on race-relevant tax data.)

I was discussing this concept of "colorblind" tax data with students recently. One of them pointed out that there is at least one place where the IRS does ask taxpayers about their race. There are optional race-related questions on Form 13614-C, the Department of the Treasury-Internal Revenue Service Intake/Interview and Quality Review Sheet. This is the form that volunteer income tax preparers typically use to gather information from clients at VITA programs around the country.

The optional questions, which the form states "will be used only for statistical purposes," elicit information about the client's ability to speak and read English, whether any member of the client's household has a disability, whether the client or the client's spouse is a veteran of the U.S. Armed Forces, and the race and ethnicity of the client and the client's spouse.

Judging by the positioning of the questions, my guess is that the "statistical purposes" have to do with gathering data about the demographics of the populations served by various VITA programs. I admit that I had never thought about the significance of that part of the form in light of Professor Bearer-Friend's  question, "Should the IRS know your race?" I'd love to know more about how this data is used and what it reveals. Sometimes the IRS does ask directly about a taxpayer's race.

Comments

[Jeremy Bearer-Friend]

Thank you for the shout out Bridget and cheers to your amazing students for diving into this work! I believe the form is the result of a second term Obama Treasury reg, after Treasury had been dragging its feet for decades on complying with the Civil Rights Act of 1964. Under that Act, grantees of the federal government must show that they do not discriminate against beneficiaries, and in the late 70s DOJ required standardized collection of race data to prove that. But Treasury wasn't requiring VITA site grantees to collect the data until a few years ago. Here's the cite for the Treasury Reg requiring the collection and how they use the data. Regulation Regarding Nondiscrimination on the Basis of Race, Color, or National Origin in Programs or Activities Receiving Federal Financial Assistance, 81 Fed. Reg. 89,852 (Dec. 13, 2016) (to be codified at 31 C.F.R. pt. 22). The ironic thing about it is that we now have higher standards for reviewing the nondiscrimination conduct of Treasury grantees than we do for IRS and Treasury themselves. Something we need to change!